The very idea sounds quite bizarre – however, according to Riot’s official stats, League of Legends, as an esport, hasn’t turned a profit… ever. League of Legends is without a doubt the biggest esport in the world, by a fair margin – and yet the esport side of it hasn’t made a profit in the decade plus it has been around.
The game itself is hugely profitable for the company – but the esport isn’t. That’s despite the fact that LoL tournaments have managed to sell out NBA arenas and even Beijing’s massive Olympic Stadium. This year’s event will be without an audience, due to the ongoing pandemic – a move that has hurt the bottom lines of several esports so far.
League creators Riot didn’t bat an eye though – after all, there wasn’t any profits to lose out on in the first place. John Needham, the head of esports at Riot spoke about the future (and the finances) of their esport. “We like to call ourselves the future of sport,” Needham said. “That’s what we think we’re building.”
They’ve come a long way too – originally, the esports side of League was a marketing tool for the main game. Now, obviously, the game dominates the worldwide esports scene. It’s quite the development – and one that’s somewhat mirrored in other esports as well. Competitive gaming is worth billions, but logistical challenges can easily eat up profits and then some… and that was before Covid-19.
Still, most esports leagues do manage to bring certain amounts of profit to their creators – more so than the teams that take part most of the time. Esports leagues, franchises and players often don’t quite make as much money as the prize pool promises. Other brands such as Blizzard earn a rather pretty penny from the franchise fees that teams have to pay to be allowed to compete in the official leagues. They also earn from broadcasting rights, but while those are quite profitable, the costs of the tournaments themselves is also considerable.
It’s not unusual for a certain event or even a year not to turn a profit – however, Riot’s decade long red digits are certainly a phenomenon all of their own. For Riot, it’s all an investment – one to grow the overall franchise fans to a billion. This is why most of the efforts the company is making are geared towards drawing in an audience – including things like the recent animated series Arcane.
Needham explained that he was aware this could take generations – and that Riot was focused on engaging current and lapsed fans, rather than straight up pulling in people who aren’t familiar with the game. “I’ll be honest. We don’t waste a lot of calories trying to convert nonleague players to watching League of Legends Esports,” Needham said. “Fundamental to the experience is knowing the game.”
With a billion fans, theoretically, Riot’s earning potential would go up quite a bit – maybe even high enough for the pro League league to finally turn a bit of profit!